Harry and Meghan 'struck deal with Palace' to pay no more rent for Frogmore Cottage after £2.4m refurb repayment

19 March 2023, 08:40 | Updated: 20 March 2023, 00:28

Harry and Meghan are said to have struck a deal with Buckingham Palace to not pay any more rent for Frogmore Cottage after repaying £2.4m of taxpayer money for a refurbishment.

Harry and Meghan were believed to have been paying a "commercial rate" for the five-bedroom royal mansion on the Windsor estate after stepping down from their royal duties in 2020.

But instead they paid five months' rent before giving a £2.4 million lump sum in September to cover refurbishment costs, according to the Mail on Sunday.

A deal is understood to have been agreed so that the payment wiped out any further financial obligations.

Despite the move not being publicly announced by the Palace, Buckingham Palace confirmed that the £2.4 million was split into three headings and recorded across two sets of accounts.

In 2020/21 figures, it is listed as both "rental income" and as "recharges for functions and other income".

The third and final part of the lump sum appeared the following year as "deferred income under current liabilities".

It is estimated that the property would cost between £150,000 and £230,000 a year to rent, which means that the couple may have saved up to £690,000.

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An accountant who analysed the accounts for the paper said: "This is an accountant's way of balancing the books. They will look at this deal and say 'Yes, but there's still value being had from the rental contract'. So there needs to be value seen in the accounts.

"By allowing the Sussexes to remain in Frogmore Cottage without any additional payments, the Crown gave away value and, as such, should recognise that. They use some of the £2.4 million for that.

"That is why they will have split the payments, to show value coming back into the estate according to the rental agreement that the Sussexes will have signed."

A Palace spokesperson said: "The Duke and Duchess of Sussex made a contribution of £2.4 million to the Sovereign Grant which covered the refurbishment of Frogmore Cottage.

"They have fulfilled their financial obligations in relation to the property.

"In line with usual practice for the Sovereign Grant report, the accounting treatment was scrutinised and signed off by the National Audit Office and the Treasury.

"As with any such agreement between landlord and tenant, further details regarding the Sussexes' tenancy arrangements would be a private matter."

However, emergence of the deal has sparked fury among some.

Norman Baker, a former Cabinet Minister and Privy Counsellor, said: "It is outrageous that Harry and Meghan should be able to live in a huge house on these terms while regular people struggle to put food on the table."

Mr Baker has since demanded to know how many Royal Family properties are rented out below the market rate.

The Royal Household said it is "committed to making Royal finances as transparent as possible".

It comes after Harry and Meghan confirmed they had been evicted from Frogmore Cottage, with the notice being given within days of Harry's bombshell memoir being released.

In the book, Harry made a series of revelations, including details on royal family feuds, how he lost his virginity and his experience taking drugs

A spokesperson for the Sussexes said: “We can confirm The Duke and Duchess of Sussex have been requested to vacate their residence at Frogmore Cottage."

The estate has reportedly been offered to Prince Andrew so he can size down from his 30-room Royal Lodge.

He has lived in the mansion, which has a 98-acre estate, since 2003, when he secured a 75-year lease.

But the property is expensive to keep up and already in need of repairs - and Charles is planning to cut Andrew's £249,000 annual allowance.